Johannes Wessels

@johannesEOSA1

Awarding a service contract for maintenance work on air conditioners to a single BEE service provider was apparently more important than keeping one of the key institutions of a market-based economy ticking, namely the Deeds Office in the Free State.

For a full week (7 to 14 January 2019), no registration of title could be done and according to conveyancers, the system is still not functioning well. A conveyancer practising since the early 70s, it was the first time this has happened. This standstill has immense implications:

Johannes Wessels

@johannesEOSA1

TEN WASTED YEARS… Tito Mboweni’s colloquium “to think outside the box about economic growth” is akin to closing the stable door after the racehorse had not only bolted, but already won a race elsewhere. Scavenging in the ANC dustbin of rejected advice, Mboweni picked Harvard economist Ricardo Hausmann as advisor, knowing well Hausmann’s advice on productive knowledge had been flatly ignored by the ANC Government since 2008.

From 1990 to 2003 South Africa lost 7% of its professionally qualified people, predominantly high-skilled whites. After some stability that came during the high growth Mbeki-Manuel years the exodus was re-triggered by the growing ineptitude of an administration that radically transformed departments and state-owned enterprises (SOEs) into little more than facades.

The police service, SAA, Transnet, the NPA and municipalities are some examples where cadre deployment trumped productive knowledge. The result:

At township level, the disgruntled resorted to service protests.

At professional level, they packed their bags and headed to the emigration counter with highly skilled blacks now outnumbering their white counterparts, bound in solidarity by a deep non-racial gatvolheid in the slide into corruption, lawlessness, dismal public services and the undermining of property rights.

At investor level, South African businessmen have emigrated through FDI: fixed investment by South Africans abroad exceed fixed investments lured to our shores.

Almost 50 years ago, in 1970, Alvin Toffler in Future Shock wrote: Knowledge will become a more important driver of growth than capital or labour.

The two parties that then dominated the South African landscape did not hear the message: they had ideological ear wax and blinkers.

Inside the country the National Party wasted an opportunity to revamp and refocus Bantu education. In the words of Verwoerd, Western education was “of no avail for training which has as aim absorption in the European community while he cannot and will not be absorbed there. There is no place for him in the European community above certain forms of labour. However, within his own community all doors are open… For that reason, it must be replaced by Bantu Education. In the Native territories where the services of educated Bantu are much needed, Bantu education can complete its full circle, by which the child is… developed to his fullest extent in accordance with aptitude and ability…”

The 80’s introduced “liberation before education”, the burning of schools and the intimidation of teachers and after 1994, the ANC government ensured SA’s education system became one of the worst performers in the world at the highest cost (% of GDP).

The harvest: a suffocating labour regime that leaves SA businesses hamstrung (considering productivity levels) and that promotes low-employment business practices.

Whilst race remains an important indicator to measure inequality, trying to always explain situations from a racial perspective often implies ignoring solutions with better potential than betting on race. The ANC is not alone in operating with racial blinkers. Musi Maimane’s statement that race remains “the only consistent measure we have at this point for measuring inequality”, is simply wrong.

So is Ramaphosa when he offered protection for Maimane for that remark.

And so is Chris Bateman’s editorial to a recent Bloomberg report on Johann Rupert’s comments during the Chairman’s Conversation when he wrote: “What he (Rupert) misses in his strong argument that Eskom and other SOEs are the real monopolies, is that White Monopoly Capital, like all effective propaganda, is built on the fundamental truth that our Gini-coefficient runs on racial lines – due to the architecture of apartheid.

There are non-racial measure tapes available… and some measure more accurately than race. After a few examples where the ANC government chose cadres rather than knowledge, the focus will fall on one non-racial explanation for income and wealth inequality.

Johannes Wessels

@johannesEOSA1

Stark dividing lines on the economy and the future of the country were drawn during the Chairman’s Conversation when Johann Rupert of Richemont, Remgro & Reinet was interviewed by Given Mkhari of the MSG Afrika Group. The Black Management Forum called for controlling the “levers of legislation to determine what happens with capital, opportunities and business prospects” (state control of the economy) with Rupert hinting that “it would be quite easy to lose interest: South Africa has one last chance…”

On talk radio, news websites and social media reactions rolled in, many calling Rupert “racist”, “paternalistic” and even “an arrogant ignorant” whilst others concurred with his comments about the young chasing BMWs and immediate satisfaction, rather than patiently building their businesses and wealth.

The event and the reactions thereto is far more than a storm in a tea cup and one that the whole business community should take note of, as well as every company and politician that had attended the recent Investment Summit.

The contours of the Chairman’s Conversation, the few comments from the floor and the tsunami of social media condemnation reminded me of a period in world history that had changed and influenced (almost) everything since then. My sense is that both Rupert and the BMF reckon South Africa is at the brink of society-shaking change as well. That change does not necessarily bode well for the future of South Africa…

Pres Cyril Ramabosasa’s written statement to the Speaker that he was not aware of a R500 000 donation by a company with large contracts with government to finance his acrimonious campaign for the leadership of the ANC, confirms he is a person with not the faintest interest in detail and quite satisfied to accept that it is “twelve o’clock and all’s well…”

It is the third time in a year that he denied any knowledge of wrongdoing at the time of the events and for a very long time afterwards. In baseball, it would have been the dreaded Strike Three and out.

But this is South African politics. And with a parliamentary system where the ANC as majority party has accepted as norm the precedent of a president that answers with a “I don’t know” and thereby dodging the crux of parliamentary questions, it will not be “Strike Three” for Ramabosasa.

The two prominent issues about which Ramaphosa also had
denied any knowledge of wrong-doing, deal with: